South Korean automakers and their suppliers have hoarded 40 percent of emergency funds as they expect sales this year to be 25 percent lower on average from a year ago due to coronavirus fallout, survey showed Thursday.

In a joint survey conducted by Korea Automobile Manufacturers Association (KAMA) and Korea Middle Market Enterprises Institute, 130 automakers and auto component manufacturers projected sales this year to be reduced by 25 percent or 17.6 billion won ($14.7 million).

They project 7.4 billion won to survive the crisis and have secured 41 percent of the sum, the survey showed.

According to the survey that was conducted between June 25 and July 17, two thirds of respondents said financing conditions have worsened since coronavirus outbreak. They have an average 15.7 billion won debt maturing within a year.

About 63.2 percent of new loans would go to purchase of components and the rest would cover labor costs, facility investment, and previous loan repayment. Only 11.8 percent would be spent on R&D.

They asked for debt rollovers, government subsidies, bank aides, and tax graces as relief measures.

Jeong Marn-ki, president of KAMA, predicted the drop in global orders would spill over the industry in the second half and warned of factory shutdowns if part suppliers stumble on liquidity woes.

By Pulse

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